How The Hustle sold for over $30M

The Hustle: An Eight-figure Exit taking the BS out of the news.

The Hustle’s story is like any other. Start a conference. Get the most successful entrepreneurs to speak at it. Make $60k on your first go. Say “screw it” and travel the world. Run it back. Make $150k this time. Then pivot into the next natural thing.

A newsletter.

Like I said, just like any other story.

Okay but in all seriousness. The Hustle is a bit of a stick-it-to-the-man story. In 2016, when Sam Parr decided to pivot Hustle Con into a newsletter business, the ever-knowing big media execs gave it no chance.

But Sam believed the numbers in front of him. Not those suited-up bigwigs.

Sam was gonna scale this thing.

5 years later and he had grown The Hustle to ~2 million subscribers, over $15M in revenue, and sold it to Hubspot for a “mid-eight figure exit”.

Today The Hustle is one of Hubspot’s most important distribution channels and served as their first soiree into owned media at scale.

But this isn’t about Hubspot.

This is the story of how The Hustle went from Zero to One. 🚀

Business model: How The Hustle makes money

The Hustle is predominantly a media business with two distinct phases:

1. Pre-acquisition: Standalone media company.

2. Post-acquisition: Key media enabler for Hubspot.

Pre-acquisition

Simply put, they made the majority of their money from selling ads in their newsletter.

Then in 2019, The Hustle launched Trends. A subscription and premium newsletter helping entrepreneurs find, you guessed it, trending opportunities.

By the time Hubspot acquired The Hustle, Trends had over 15k subscribers, paying ~$299.

Then in 2019, Sam and Shaan Puri (an era-defining business shit-talker and my favorite podcast host, sorry Sam) added the My First Million podcast to The Hustle portfolio (quick side-note, although I’m not too sure of the legal structuring of the podcast, what I do know is that it is now part of the Hubspot media network). The business model was the same here. Good old ads baby.

There was also one other revenue stream, pre-Covid, which was Hustle Con. Conferences where Sam brought in entrepreneurs, including Casey Neistat, and the founders of Grammarly, Casper, and The Athletic, to give brief stories on their journeys.

Post-acquisition

The Hustle went from business to enabler.

Becoming the key media distribution channel for Hubspot. Who acquired the company for “mid-eight figures” - there are reports that say $27M, but Sam has publicly said that all the reports have understated the sale price. So I would guess somewhere around the $45M mark (~3x multiple on revenue).

This marked not only a transition for The Hustle, but for Hubspot as well, whose stock price skyrocketed after their investment into owned media.

From a high-level, The Hustle’s model never changed. Advertising. It’s just now the ads all point in one direction.

The Hustle’s Growth

Before we take a look into The Hustle’s growth, we need to take a step back to look at where it all started. The bright lights of Hustle Con.

Sam launched Hustle Con in 2014, using blogs and email as a way to get people to buy tickets - writing deep dives into the speakers. A great growth hack by the way, stroked egos tend to share a lot more with their audiences.

Pretty quickly, Sam realized that he didn’t want to rely on a business model where some bad weather could kill the whole thing. So he looked at the numbers and realized the newsletter could be huge.

And in April 2016, they went all in on the daily newsletter.

Within 2 months of launching, they had 555,958 unique viewers on their website by hitting the front page of Reddit, and were collecting about 3k emails per week - on par with TheSkimm, Elite Daily, Thrillist, and Business Insider all while posting much less content and without a full-time writer.

From here, there was no looking back. Hitting ~150k within its first year, and growing at 30k subs per month at some points.

The next year it hit 500k subs. And in just over two years from launch, The Hustle had 1 million subscribers and grew to around 1.7M by the time they sold.

And these weren’t vanity metrics either. In 2017, just over one year after launching, The Hustle did ~$500k. With Sam reaching out to every founder who had spoken at a Hustle Con and giving them a discounted price to advertise. This crushed it, making up 100% of their first $30k in revenue.

The Hustle then did $2.2M the next year. $7M the year after that.

And when Covid hit, the business almost doubled again. Hitting $12M in 2020.

The year Hubspot acquired The Hustle, it was on pace to hit $20M.

The growth tactics you can expect today

1. Feeding a starving crowd

2. Fetching users from where they’re are already at

3. Paying to play

Without further ado, let’s get into it:

1. Feeding a starving crowd:

There’s something to be said for building a great product. It’s hard. And we tend to glorify it above all else. Product building is the sword many founders live and die on.

But I’m not sure it’s the right metric to focus on. There’s something much more important: the market you’re entering.

And more specifically: the problem you’re solving in that market.

And even more specific than that: the pain level people feel about not having that problem, in that market, solved.

You can have an awesome product. But if you’re not solving a true pain point, it will likely never succeed.

It’s why it’s better to fall in love with the problem you’re solving. Not the product you’re building. Your job as a founder is not to build a solution. It’s to solve a problem.

The solution is just a vehicle in which you solve it.

It might sound crazy now, but in 2016, there was nothing like The Hustle (well except for Morning Brew - which led to a battle, much like Messi and Ronaldo’s, where everybody got better and won).

Even the idea of a newsletter business didn’t make sense to so-called thought leaders in media.

But they missed that the foundation for a great product was there.

The fact that there was nothing like it was a great thing. It reminds me of this beautiful Paul Graham quote: “Which means, strangely enough, that coming up with startup ideas is a question of seeing the obvious. That suggests how weird this process is: you're trying to see things that are obvious, and yet that you hadn't seen.”

The obvious problem Sam was solving? There was no news for millennials who cared about business. A gap that with hindsight seems so obvious to solve. The perfect outcome for a great startup.

They had found an audience who were starving. And he served them up the chef’s best dish. A daily newsletter with no bs reporting.

But how did The Hustle actually execute this, and more importantly, how can you:

Find your underserved market

Sam started the Hustle when your choices for business news were the NYT and the WSJ, or Forbes.

Two written for your dad’s dad and the other plagued by your favorite scammer’s favorite (let me just stop here. You get the picture)

There was this chasm for millennials who cared about business and professional growth.

Sam had found an audience who were starving. They wanted news. But news written for them. And they wanted it with:

• Only the most important stories and resources

• No BS and fluff

• No complicated language

The trick here is to find a group of people (ideally some with money). Speak to them. Find out what they’re missing. And get something out there to test it with them.

The Hustle grew out of Hustle Con, an events business Sam was running which brought cool founders to talk about their stories and how they grew their businesses.

He started collecting emails to get people to buy tickets. It was never intended to be the main business. But Sam realized people were loving it and the unit economics checked out. So they started putting more priority into it, until they realized it should be the main business.

Be like them

The thing with finding an underserved market and building for them is that for best results you need to be like them. Or at least have someone on your founding team who is.

Firstly, it’s hard to spot this gap and know if it’s a deep pain if you’re not feeling it yourself. You don’t want to be solving a meh problem.

Secondly, it helps when building your solution. You have a more intuitive understanding of your customers and what the actual root cause is (we went deeper into this in the final Arc episode). You can then use this intuition to guide your product roadmap and serve customers better.

What can also be underappreciated is that if you’re like your users, they tend to like you more. They have an intrinsic belief in you and a desire for you to win.

So if you’re like your users. Show them.

The Hustle was excellent at making readers feel like they were one of them. They crafted this awesome voice which became your no-BS friend who told you about the news.

Their tone was relaxed. Swearing was allowed. Slang was used. And it felt like The Hustle was just another one of your friends. The smart one. But also the funny one. So the one you love to hate to introduce to your parents.

But also who you love to brag about to others…

Build a community (Get them fat)

Communities are hard.

There’s a bunch of work that goes in behind the scenes that you and me, as members, will never see.

It’s a job that never ends.

Until you get it right.

There’s this tipping point with communities. When you no longer have to reply to your own posts with 5 pseudo accounts. And when you no longer have to reply to other members.

Why? Because the rest of the community is doing it for you.

This is the beauty of a community. The members feed each other.

And then they attribute most of this value to you. Even though you’re no longer they driving force. They are.

The excruciating part is getting here.

The Hustle started to bring on Ambassadors (more on this in episode 3). What’s important to know, is that there was a FB group for them (for you younger folk, that’s the dark blue app with an “f” you see on your mom’s phone).

Sam spent hours everyday posting, replying to others, stimulating conversation. Getting the people going.

And he did this for over 18 months. Over a year and a half.

But then self-sustaining bliss and a group who The Hustle can:

• Test product ideas with

• Get the inside scope

• Understand how users feel

• Get real feedback

The Hustle Ambassadors became a key part of its growth (more on this below). With Sam using the insights from them to keep that cult-like feeling around The Hustle. The good kind of cult of course.

2. Fetching users where from where they’re already at:

Within two months of launching The Hustle was growing at a similar pace as some of the world’s biggest media companies: TheSkimm, Business Insider, and Morning Brew. And this was with only 33 pieces of content.

They had 555,958 unique viewers on their blog within these first two months. That is crazy high.

Sam mentioned that the Hustle had a ~3% conversion rate to email subscribers at this stage, which meant the Hustle had grown ~16k subscribers (users for a newsletter) in just two months. And this was on top of the 10k+ subscribers they already had from their HustleCon days.

The thing is finding your first customers (readers for The Hustle) is hard.

So how did they scale so quickly?

First, they found a massive gap in the market, as we discussed above. But knowing there’s a gap isn’t the same as letting others know you filled it.

So The Hustle went to where their users already hung out and brought them back with them.

They didn’t wait for their target audience to stumble across them. Instead, they put themselves right in front of their target audience.

By doing this users didn’t have to change any behaviors to become aware of The Hustle. They removed friction and reduced the steps required for readers to become aware of them.

Finding their landing spot

The first step: Sam had to find where their target audience was already hanging out.

And for the millennial entrepreneurial nerds of 2014-2016, that was Reddit and HackerNews.

Today that would most likely be X, or dare I say, LinkedIn.

Now you might think that they went straight to the typical business-y subreddits. Which they did. But where they got their most success was from thinking about other interests or hobbies their target readers would have.

For example, one of the Hustle’s most successful articles was on r/soylent, a meal replacement. But a meal replacement that was targeted for tech bros coding the night away.

Probably someone with a lot of drive and a desire to achieve more. Just the type of person The Hustle was looking for.

But this time without all the competition of similar thought on r/entrepreneur.

It’s an important lesson that when looking for where your ideal users are already hanging out, it doesn’t have to be completely in line with your product or service. But rather think about the behaviors of your target users and go there.

Winning with depth > quantity

Once The Hustle found their subscribers they needed to get them to their blog, where they ultimately tried to convert them into newsletter subscribers, the core business.

What The Hustle did differently to most was focusing on big bets, weekly posts that required a lot of effort, research, and time to write, instead of just trying to get as many posts as possible out and play the quantity game.

The Hustle posted unique content that engaged users outside of just “business” and because of this stood out. With between 30-50% of articles bringing in substantial readership.

To give you some perspective on just how awesome these early articles were, here are links to a few (that all did over 100k views in a week):

• Soylent: What happened when I went 30 days Without Food

• Part 1: Confessions from the Underground World of Kindle eBooks

• How Pandora's Founder Convinced 50 Early Employees to Work 2 Years Without Pay

• Google Has a Secret Interview Process… And It Landed Me a Job

And it was this type of content the posted on super-targeted subreddits: r/microdosing, r/soylent, r/selfpublishing, like we mentioned above.

But something else that stands out with these articles is their likelihood of being shared. Every one of them leaves you with a “no way” or “wtf”. I.e. they envoke emotion. And this was something Sam and the rest of the team were awesome at.

This depth-over-quantity approach, together with their shareability helped The Hustle grow at a much faster rate per article than other publications.

Hustle the forgotten text

The thing with a tactic like this is it requires a ton of hustle (😉). You’re cranking out high quality pieces of content every week. And for most the time, they were a four person team. With no dedicated writer.

Unless you count Sam’s 3 pen names, each with their own LinkedIn and Twitter profiles.

What these 3 pen names were great for was giving legitimacy to The Hustle, but also to provide different perspectives - Sam would write content through the lens of people close to him. Giving readers more faces to feel a connection to.

But that side note aside, The Hustle were bringing in thousands of unique readers per week. They wanted to make sure they kept them.

Their approach? Putting personality into what Sam refers to as the “forgotten text” - popups, 404 pages, welcome emails.

Starting with an iconic popup:

“well while you’re here, we wrote these blogs to get people to our daily newsletter. If you don’t like it, I’ll Venmo you a dollar”

This pop-up, just like the Hustle, didn’t take itself too seriously. People loved that.

And after that, the personality continued with the Hustle’s quirky welcome email:

One that engaged users and got them more likely to not only come back but also to share The Hustle.

Being different and sweating the small details helped the Hustle stand out and convert readers to subscribers, and then into loyal advocates.

3. Paying to play:

A lot of people who start newsletters use ads as an early growth channel. And it makes sense: faster growth, repeatable, and predictable.

But there’s a problem. It’s often a false signal of profitable growth.

You’re trying to brute force your content to people without finding PMF/CMF (Content-Market FIt). Typically this means higher acquisition costs and lower future revenues.

So The Hustle flipped this. Getting to >100k subscribers before investing in paid marketing.

They had found their CMF and could easily calculate the LTV of a customer having monetized for a while by this point.

From here there was no looking back. Going all in on finding channels they could pay to acquire a reader for less than their LTV.

Figure out your unit economics

Facebook and other digital ads completely changed the way marketing was done.

It was a digital tap that you could turn on and keep increasing the pressure.

But underlying all of this was the principle of unit economics. I.e. per unit of what you do, how much profit do you make (if any)? In The Hustle’s case, their unit is subscribers.

Another way to think about it is what it costs to acquire a customer (CAC) vs the money that customer will earn you in their lifetime (LTV).

The great thing about digital ads is that they are extremely measurable. And as long as your LTV is greater than your CAC. You should continue to use that channel to grow.

Because it means that you are acquiring customers profitably (even if you don’t see the revenue immediately).

It’s how newsletters can scale to millions of subscribers in short amounts of time.

And The Hustle was one of the pioneers of this.

Two quick sidenotes:

One: If you’re looking for the exact way to calculate LTV for a newsletter, beehiiv does a great job of breaking it down here.

Two: You might be thinking that what I’m saying doesn’t apply to all businesses, particularly VC-backed startups trying to blitzscale/ winner-take-all markets.

And while you’d be right in that they don’t earn an instant return on their ad spend, the principle of unit economics remains. It just gets pushed down the road. And in some cases, the very act of doing this increases your unit economics as you acquire more users.

Scale with ads

Given you’re reading this newsletter, I’d be willing to bet that you’ve seen this ad before (or at least a variation of it):

And you’ve probably seen it a lot.

Firstly, because it crushed it for The Hustle.

Secondly, repetition is often indistinguishable from the truth.

If you see the same message enough, you will start to accept it as given.

This repetition gave this ad cult-hero status.

It worked so well that The Hustle spent over $10m on it alone.

Assuming a $10 CPM (cost per 1,000 views) that would mean this ad was seen over 1 billion total times.

And that’s not including all the different copies of it you’ve probably seen from other newsletters that crushed it for them as well:

Besides repetition. Why did this ad do so well?

Well from a high-level point of view two things stick out:

• Helps you be seen as smarter at your job (different and, for most people, more important than actually being smarter)

• It’s as easy to do as read The Hustle. No long and complex processes. Anyone can do it. People feel like they’ve found a loophole.

Facebook wasn’t the only channel The Hustle used for paid growth. They also experimented with LinkedIn ads and sponsoring other newsletters (a tactic the Morning Brew helped pioneer).

The key lesson here is to find messaging and a platform that works and then double down on it. It might not be Facebook (or Meta now) for you. But make small bets until you find a hint of gold. Then keep digging until all of it is gone.

Incentivize community

It’s often said that word of mouth is the best form of advertising.

But how the hell do you control this?

Well, sadly you’ll never have 100% control over this.

The best, and first, thing you can do is create a product/service so great that people want to share it.

Once you have something so great people want to share it, that’s when you can step in and give them a little nudge.

The Hustle did this by creating an ambassador program where they rewarded people for sharing The Hustle.

The rewards have changed over time, but the principles behind them have not.

Create rewards that are specific and appealing to your audience. And where the unit economics of them are profitable.

For the Hustle that included:

• Discounts for HustleCon tickets

• Free HustleCon tickets

• Speakers dinner post HustleCon

• Hustle swag

• Flights to SF to hang with them

All things a reader of The Hustle would want.

And because they knew the LTV of a customer, they knew how much they could spend for each referral to make sure it was still profitable. This led to some pretty awesome rewards.

A win-win-win. The Hustle, its ambassadors, and their referees.

On top of this, the team made sure to make every ambassador feel extra special with a handwritten note for anything they had mailed to them.

By the time The Hustle had hit 1.5m subscribers, their ambassadors had accounted for around ~300k of them.

My picks to take your business to the moon 📽️

• Fastest way to $100k MRR (link)

• Launch playbook for local newsletters (link)

• How to grow your business on Reddit (link)

Tools of the week 🔨

• Narrativ: Social media that gets attention.

• Riverside: Have a podcast? Don’t overthink it. Just use Riverside.